Soft drinks, dairy products to cost more

Consumers will shoulder higher living costs once the Commerce Ministry allows the retail price of soft drinks and dairy products to rise by Bt1 per unit. The rises stem from higher costs for raw materials. A source said yesterday the ministry had to allow retail prices to increase because producers faced higher costs of production.

The Kingdom's leading soft drink producer wrote to the ministry several months ago, saying they faced higher burdens after the price of sugar jumped Bt5 per kilogram.

Sugar is a major ingredient in soda drinks. Companies want to raise prices by Bt1 a bottle to cover their higher costs.

"Soft drinks are not a necessity for consumers and there are many producers in the market. Allowing a price rise should only affect consumers slightly," the source said.

"However, it might push up inflation, as these products are popular among consumers."

Despite a policy to try to control retail prices for more than three years, the ministry had to accept the reality of the situation that manufacturers faced higher production costs.

The government could no longer freeze prices as producers were also suffering from rising costs, the source explained.

Yanyong Phuangrach, director-general of the department, said the department would consider allowing the price of milk to rise after the matter had been considered by a sub-committee assigned to review the matter.

So far, only CP Meiji had asked the ministry for a rise in retail prices. Officials must consider the structural costs of raw materials, but were expected to allow an increase found to be based on real production costs.

Meanwhile, the Agriculture Ministry has approved a Bt3.50 hike in the price of raw milk to Bt18 a litre. This is expected to increase costs for producers of dairy producers by 12-15 per cent or Bt1-1.25 per 250cc carton.

However, the ministry plans further measures to try to limit the burden for consumers, especially on goods deemed to be necessities.

Yanyong said some products would tagged as priority products for price controls.

So far, 35 products were on the ministry's price control list. They include fertiliser, steel, cement, vegetable oil, and car batteries.